Mattel's News Anchor Barbie (L) and Computer Engineer Barbie are shown in front of a display of career-doll Barbies at the Toy Fair in New York. Mattel Inc, the world's largest toymaker, reported its third straight fall in quarterly revenue due to a drop in demand for Barbie dolls and Fisher Price preschool toys.

Mattel Inc. (MAT), reported Thursday a 9 percent decline in revenue during the second quarter – making it the third straight quarter of revenue declines for the California-based toymaker. Sales of Barbie, Mattel’s iconic doll, fell 15 percent during the second quarter, the biggest sales decline since 2009. Sales of Barbies have fallen eight of the past 10 quarters, according to Reuters.

Sales of other Mattel brands didn’t fare well either. Sales of Hot Wheels was down 2 percent, and Fisher-Price's sales fell 17 percent. There was one bright spot for the toy company: Sales of American Girl dolls were up 6 percent.

Markets didn’t respond well to news that there are troubles at the world’s largest toy maker. Mattel stocks fell almost 7 percent, ending Thursday trading at $36.46 a share.

But Mattel CEO Bryan Stockton said the acquisition of MEGA Brands will bring a boost to the company. "In the second quarter, we made significant progress across a number of initiatives to better position Mattel in the second half of the year and beyond," he said in a press call. Mattel bought the Canadian company in April for $423 million. Many see it as a move by Mattel to enter the toy building blocks market currently dominated by Denmark-based Lego.

Stephanie Wissink, an analyst for Piper Jaffray, told Reuters that Mattel was struggling to innovate.

"(Mattel) has overly relied on its capital muscle and not on its innovation intellect to really build consumer following," Ms. Wissink told Reuters. She added that strong demand for toys based on the Disney movie “Frozen” drove down the sale of Barbie and Monster High, a horror-themed line of fashion dolls.

"The star of the portfolio in the quarter was our line of products supporting Disney's Frozen, and we are continuing to chase demand here," Mr. Stockton said on a conference call with reporters, according to USA Today. "Monster High remains the number two doll in the fashion doll category per [net domestic product], but the brand is coming up against some very challenging."

Stockton added in the conference call that the future of the toy industry is bright. "[Overall,] the toy business is doing well in 2014, up between 3-4% in both the U.S. and Europe," he said.